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Arts Group CRM Success: A Customer and Competitive Necessity ASPIRE Total Customer Development tm

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Why CRM is a Customer and Competitive Necessity <ul><li>It typically costs 5-10 times as much to acquire a new customer as it does to retain an existing one. </li></ul><ul><li>“ Some companies can boost profits by almost 100% by retaining just 5% more of their customers.” Harvard Business Review (Reicheld & Sasser) </li></ul><ul><li>A recent McKinsey study showed that the average new customer spends $24.50 at a given web site in the first 3 months as a shopper. The average repeat customer spends $52.50 every 3 months . </li></ul><ul><li>Most companies lose 50% of their customers in 5 years (Harvard University) </li></ul><ul><li>On average only 15% of a site’s customers consider themselves loyal to it. The loyalty rating among people who had experienced a problem was only 6%. Customers who had not experienced problems indicated a customer loyalty rating of 19%. The loyalty rating among customers who had experienced problems but were satisfied with the way they were handled: 21%. (Digital Idea) </li></ul><ul><li>70% of repeat purchases are made out of indifference to the seller, NOT loyalty. (eLoyalty) </li></ul><ul><li>The web customer is ‘ only 1 click away from your competition’. </li></ul>

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What is Customer Relationship Management (CRM)? <ul><li>Customer Relationship Management (CRM) is: the integration of sales, marketing, service and support strategy, process, people and technology to maximize customer acquisition, value, relationships, retention and loyalty. </li></ul><ul><ul><li>A Redesigning of your Business from the Outside In. </li></ul></ul><ul><ul><li>Customers, Data and Database at the Center of your Organization (Customer-centricity). </li></ul></ul><ul><ul><li>A organization-wide single customer view. </li></ul></ul><ul><ul><li>A Foundation for “ 1to1 Marketing: Treating Different Customers Differently” (Single Ticket Buyer vs. Subscriber) </li></ul></ul><ul><ul><li>A Means to Your Total Customer Development Ends. </li></ul></ul>

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CRM Strategies <ul><li>Customer Acquisition </li></ul><ul><li>Gain the greatest number of new “Best” customers as early in their “lifespan” as possible. </li></ul><ul><li>Customer Retention </li></ul><ul><li>Retain and expand your business and relationships with your customers through up-selling, cross-selling and servicing. </li></ul><ul><li>Customer Loyalty </li></ul><ul><li>Offer programs to ensure that your customers happily buy what you offer only from you. </li></ul><ul><li>Customer Evangelism </li></ul><ul><li>Enable loyal customers to become a volunteer sales force. </li></ul><ul><li>Cost Reduction </li></ul><ul><li>Reduce costs related to marketing, sales, customer service and support. </li></ul><ul><li>Improve Productivity </li></ul><ul><li>Enhance your e-business strategies. </li></ul>

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Why Arts Organizations Must Adopt CRM <ul><li>Arts groups today are struggling to do more with less . </li></ul><ul><li>Rising competition for entertainment/donor dollars, especially as supporters reduce the number of causes they support. </li></ul><ul><li>T he need for new programs and services continues to grow . </li></ul><ul><li>Budgets have tightened in the wake of declining endowments, reduced government, corporate and foundation funding. </li></ul><ul><li>Organizations are finding it tougher to sustain sales , fundraising and other forms of constituent support as t raditional marketing models are not working as well. </li></ul><ul><li>Must add and integrate additional customer information and communication channels to respond to demand. </li></ul><ul><li>The “New Consumer” / “Buyer-Centric” market demands it . </li></ul>

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The “New Consumer” / “Buyer-Centric” Market <ul><li>Relevancy </li></ul><ul><li>I am n ot overloaded by irrelevant data. </li></ul><ul><li>Experiences </li></ul><ul><li>I seek “Memorable and Remarkable Experiences” over Products. </li></ul><ul><li>Attention </li></ul><ul><li>I am u nwilling to waste attention. You must earn It. </li></ul><ul><li>Value </li></ul><ul><li>I e xpect to receive 2-3x value in return for investing my attention. </li></ul><ul><li>Desire For Knowledge and Individuality </li></ul><ul><li>I desire information that is valuable to me because it enables me to decide what to do, and how best to do it. </li></ul><ul><li>Decoded Complexity </li></ul><ul><li>I will turn to reliable sources of “evaluated” information and may find it convenient to complete my purchase at the same time, and at the same point. </li></ul>

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The “New Consumer” / “Buyer-Centric” Market <ul><li>Not Deliberately Misled or Confused </li></ul><ul><li>Your uncoordinated marketing communications result in a lack of congruency or no “single version of the truth” to me. </li></ul><ul><li>Organizational Memory </li></ul><ul><li>I expect all employees that I interact with to “know” me. </li></ul><ul><li>Respects Privacy </li></ul><ul><li>My data is not shared with anyone and is only used to improve your value and service my needs. </li></ul><ul><li>Problems and Needs </li></ul><ul><li>I expect you to solve my current and future problems and needs quickly, professionally and efficiently. </li></ul><ul><li>Can Quickly Find Information Pertinent to Current Interests </li></ul><ul><li>Ideal: Let me define what information I am interested in, and “an agent” would go and find it for me, and report back later in a form, at a time, on a device, and over a medium appropriate to me. </li></ul>

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Arts Organizations CRM Case Studies <ul><li>The Royal Shakespeare Company : Needed first-rate data analysis of our customer information and feedback to inform programming, pricing and virtually every other aspect of their business. Wanted to create an organization that was thoroughly customer informed. “We can now confidently predict that the use of CRM is going to help us to achieve most of our business objectives . It shows that we can all benefit: we will be more efficient and - because we will be better informed - we can be bolder in our decision making. And it works at every level from artistic planning decisions down to seating plans.&quot; </li></ul><ul><li>Carnegie Museums of Pittsburgh : Increased its email house file more than 50 % in just 8 months. Now sends quarterly newsletters to members. The average online gift is 16 % higher than offline gifts. Attendance is up for events that are marketed & managed online. </li></ul><ul><li>HoustonPBS : Raised more than $123,000 online via pledge drives in 14 months. Has completed 33% of event registrations online. Used online communications in the wake of eliminating roughly $150,000 annually in paper-based communications. Just launched a “members only” area, offering a wide array of services, which will help to grow loyalty. </li></ul>

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Arts Group CRM 3 Final Thoughts <ul><li>“ As you better understand your customer base, you will be able to develop ever better business rules and processes, which will fuel personalisation engines, drive customer contact strategies and maximise marketing effectiveness.” </li></ul><ul><li>“ Continuing to deliver a consistently improving experience to consumers across multiple channels will determine a company’s ability to retain customers over time, thereby enhancing their lifetime value to the company.” </li></ul><ul><li>eCRM / E-Mail marketing on-the-job training is playing with fire. “It is important to work with a team experienced in delivering successful eCRM projects and integrating them with existing business processes. eCRM / E-Marketing, more than any other discipline, represents the ultimate fusion of marketing and IT skills and knowledge.“ </li></ul><ul><li>1 Year Benchmark: How much have you improved your key customer development metrics by May 17, 2004? </li></ul><ul><li>CRM meets eCRM: An Executive Briefing , February 2001, Ashley Friedlein </li></ul>

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Arts Group CRM Success: A Customer and Competitive Necessity ASPIRE Total Customer Development tm

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Permission Based Marketing <ul><li>A program based on consumers granting a marketer permission to communicate with them. </li></ul>

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Call to Action: <ul><li>Sign up for eCAPA and receive special offers for Chicago Theatre events </li></ul>

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Basics of eCAPA Membership: <ul><li>Anyone with an email address can join at no cost </li></ul><ul><li>Members have ability to purchase tickets to most Chicago Theatre shows before general public </li></ul><ul><li>Members will occasionally receive email only offers for discounted or free tickets </li></ul><ul><li>Members will never have their name/email address sold or given to another organization. </li></ul><ul><li>Members can opt out at any time </li></ul>

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Our Philosophy: Only send messages that have value to the consumer.

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eCAPA: The First Year <ul><li>Most addresses collected via lobby intercepts </li></ul><ul><li>5-10% of audiences typically responded (150-350 email addresses for a sold out show) </li></ul><ul><li>4,000 names by Spring 2001 </li></ul>

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eCAPA: The First Year <ul><li>Almost all email addresses entered manually by Chicago Theatre staff </li></ul><ul><li>Database hosted by list-serv company </li></ul><ul><ul><li>Emails sent in text format </li></ul></ul><ul><ul><li>No segmentation </li></ul></ul><ul><ul><li>No information on click-thrus, bounces or opt-outs </li></ul></ul><ul><ul><li>Effectiveness measured entirely by number of purchases made with ticket code </li></ul></ul>

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eCAPA: The Second Year <ul><li>August, 2001: </li></ul><ul><li>CAPA receives funding from the Joyce Foundation to further develop program with an emphasis on attracting African-American and Hispanic audiences, and with a goal toward sharing “best practices” with other organizations </li></ul>

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Survey Respondent Email Usage <ul><li>Business </li></ul><ul><ul><li>Several times a day (66%) </li></ul></ul><ul><ul><li>Once a day (8%) </li></ul></ul><ul><ul><li>N/A (21%) </li></ul></ul><ul><ul><li>2-3 times a week (3%) </li></ul></ul><ul><ul><li>Once a week (2%) </li></ul></ul><ul><li>Personal </li></ul><ul><ul><li>Several times a day (52%) </li></ul></ul><ul><ul><li>Once a Day (24%) </li></ul></ul><ul><ul><li>2-3 times a week (13%) </li></ul></ul><ul><ul><li>Less than once a week (5%) </li></ul></ul><ul><ul><li>N/A (4%) </li></ul></ul>

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Why do you delete unread email? <ul><li>Not interested in subject line (67%) </li></ul><ul><li>Don’t know who from (42%) </li></ul><ul><li>Looked like spam (33%) </li></ul>

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How Often Do You Want Emails? <ul><li>Once a week (30%) </li></ul><ul><li>As often as new info is available (26%) </li></ul><ul><li>Twice a month (21%) </li></ul><ul><li>Once a month (11%) </li></ul>

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August 2002: Time for a Check Up! <ul><li>Second survey went to 10,464 people – over 1,400 people responded </li></ul><ul><li>Welcomed suggestions and comments on programming, eCAPA and theatre experience </li></ul><ul><li>Comments overwhelmingly positive: consensus was “give us more!” </li></ul>

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eCAPA User Comments <ul><li>“ I enjoy the email updates. I don’t need any more mail at home to sort through and recycle. This system works great!” </li></ul><ul><li>“ I like the frequent but not intrusive nature of your marketing. I like it that I’m informed about upcoming performances.” </li></ul><ul><li>“ I enjoy getting the e-mail reminders , without which I would miss too many opportunities to see favorite performers.” </li></ul>

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Internet Marketing is Viral <ul><li>Encourage and incent forwarding – a relevant email can reach more people through forwarding </li></ul><ul><li>CAPA recently entered patrons who told friends about eCAPA into a drawing for a Cirque du Soleil VIP package – almost 1000 people passed the email on to their friends </li></ul><ul><li>April 2003’s “The Wiggles” presale went viral and resulted in over 2000 tickets sold and 100 new CAPA memberships </li></ul>